When you're self-employed, there's no HR department, no employer group plan, no safety net. You are the business. Individual life insurance is the foundation everything else rests on.
| Benefit | W-2 Employee | Self-Employed |
|---|---|---|
| Group Life Insurance | 1–2× salary provided | None — you buy or go without |
| Disability Income | Short & long-term often included | None — you buy or go without |
| Coverage Portability | Ends when job ends | Individual policy — yours forever |
| Premium Cost | Employer pays majority | You pay — 100% on you |
| Coverage Amount | Capped by employer plan | Up to $5M+ — you choose |
Employees have a safety net — employer group life, HR departments, company disability plans. When you're self-employed, none of that exists. Your income, your family's security, and often your business's survival depend entirely on you showing up. Individual life insurance is the foundation that replaces the employer safety net you don't have.
For self-employed individuals, personal term or whole life premiums are generally not deductible as a personal expense. However, key-person life insurance premiums — where the business owns the policy to protect against the loss of a key employee or owner — may be deductible as a business expense. Consult your CPA; Tower Hill can structure coverage for either scenario.
Self-employed Texans need to account for: personal income replacement (10× income), outstanding business debt and SBA loans, buy-sell agreement funding if you have a partner, and any personal mortgage or family obligations. A sole proprietor netting $90,000 with a $300K mortgage and $150K in business debt might target $1.2M+ in total coverage.
Key-person insurance is a policy the business owns on a critical employee or owner. If that person dies, the death benefit goes to the business — keeping it solvent, covering operating losses, and funding a transition. If your business would struggle to operate or repay loans without you, key-person coverage is worth a conversation with our advisors.
Coverage amounts are set at application based on your income at that time. Carriers typically use a 2-year average of your net business income (from Schedule C or K-1) to establish your maximum insurable income. Fluctuating income doesn't disqualify you — it just requires documentation. Our team will guide you through the income verification process.
Yes. Most self-employed applicants qualify for accelerated underwriting — answer health questions online and get a same-day decision. For higher coverage amounts (over $2M), traditional underwriting with a medical exam may be required, but the process is still simple: a brief paramedical exam at your home or office.
Get your rate in 2 minutes. Texas-licensed advisors specialize in business owner and self-employed coverage — personal and key-person.
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